CPA Letter for Verification of Self Employment is a document issued by the loan applicant's CPA or Tax Preparer who affirms that they prepared the applicant's tax returns and that the applicant is self-employed. The primary purpose of the letter is to independently verify the self-employment status of the loan applicant(s).
It is recommended that the letter contain the following:
The applicants should obtain a copy of the letter and ensure that it contains the elements listed above and any additional information required by the lender. Also, ensure the accuracy of the information in the letter.
The review of the letter is generally performed by the processing or the underwriting department of the lender. The lender’s review of the letter may include the following:
Prior to issuing any letters, tax preparers and CPAs must consider the scope of their relationship with the borrower. Only affirm factual information and do not provide any forward looking statements, projections, or opinions. It is advisable to make it clear in the letter that the CPA is not providing any assurance as to the creditworthiness of the borrower. The lender assumes has to perform its own due diligence and the letter does not create any legal relationship or obligation of the CPA.
Tax Preparers and CPAs are recommended to check their professional code of conduct and standards before issuing such letters.
Updated: Aug 11, 2013